Alumina maintenance and production resumptions offset each other, with spot alumina prices holding up well [SMM Alumina Morning Comment]

SMM Alumina Morning Comment on May 28

Futures Market: Overnight, the most-traded alumina 2509 futures contract opened at 3,028 yuan/mt, with a high of 3,053 yuan/mt, a low of 2,986 yuan/mt, and closed at 3,013 yuan/mt, down 5 yuan/mt or 0.17%, with open interest at 392,000 lots.

Ore: As of May 27, the SMM imported bauxite index was reported at $73.7/mt, up $0.37/mt from the previous trading day; the SMM Guinea bauxite CIF average price was reported at $74/mt, unchanged from the previous trading day; the SMM Australian low-temperature bauxite CIF average price was reported at $70/mt, unchanged from the previous trading day; the SMM Australian high-temperature bauxite CIF average price was reported at $65/mt, unchanged from the previous trading day.

Industry News:

(1) A large alumina refinery in Shandong raises liquid caustic soda purchase price: According to SMM, starting from May 27, a large alumina refinery in Shandong adjusted the purchase price of 32% ionic membrane liquid caustic soda, increasing it by 20 yuan/mt from the previous basis of 800 yuan/mt. The ex-factory price under the two-invoice system will be 820 yuan/mt (equivalent to approximately 2,563 yuan/mt converted to 100% concentration).

Basis Report: According to SMM data, on May 27, the SMM alumina index had a premium of 234.48 yuan/mt against the latest transaction price of the most-traded contract at 11:30.

Warrant Report: On May 27, the total registered alumina warrants decreased by 6,891 mt from the previous trading day to 143,500 mt. In the Shandong region, the total registered alumina warrants remained unchanged from the previous trading day at 601 mt. In the Henan region, the total registered alumina warrants decreased by 1,202 mt from the previous trading day to 1,799 mt. In the Guangxi region, the total registered alumina warrants remained unchanged from the previous trading day at 6,304 mt. In the Gansu region, the total registered alumina warrants decreased by 1,201 mt from the previous trading day to 5,105 mt. In the Xinjiang region, the total registered alumina warrants decreased by 4,488 mt from the previous trading day to 129,700 mt.

Overseas Market: As of May 27, 2025, the FOB Western Australia alumina price was $370/mt, with an ocean freight rate of $21.40/mt. The USD/CNY selling rate was around 7.21. This price translates to approximately 3,270 yuan/mt for the external selling price at major domestic ports, which is 11.26 yuan/mt higher than the domestic alumina price. The alumina import window remains closed.

Summary:

Last week, some enterprises in north China underwent maintenance, while some alumina refineries in south China completed maintenance, leading to a rebound in operating capacity. Overall, the national alumina operating capacity increased by 1.09 million mt MoM last week. In the near future, some new alumina enterprises are expected to undergo maintenance, while some enterprises are expected to complete maintenance and resume operating capacity. Overall, the operating capacity is expected to continue to rebound slightly. Driven by news of supply-side disruptions in the bauxite market, bauxite ore prices have risen, and the cost-supporting effect on alumina is expected to strengthen. Coupled with the fact that the short-term fundamentals have not shifted towards a surplus, there is still upward momentum in prices. However, with supply recovery, the rise in alumina prices may encounter resistance, and spot alumina prices are expected to hold up well in the short term.

[The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. Clients should make decisions cautiously and should not rely on this to replace their own independent judgment. Any decisions made by clients are not related to SMM.]